Google doesn't know all your Web History. For example it knows which links you clicked in search results but it doesn't know how much time you spent on them, when you closed them or which links you clicked on those pages.
Then it can track only links you click on Google websites. So you clicking on your friend's profile in Facebook will not get logged in here. Unless it is browser extension it can not track * every * link.
if you use the google toolbar for firefox, you can opt in to web history which tracks exactly what you say. i didn't see the option for it in chrome, and i don't think they make the toolbar for firefox anymore (?) but i used to find it a very useful feature.
